Is Activision Likely to Outperform?

February 08, 2013

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E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio and balance sheet for Activision are perfect.

	Debt-To-Equity	Cash	Long-Term Debt
ATVI	0.00	$3.96 Billion	$0
EA	0.28	$1.49 Billion	$554.00 Million
TTWO	0.67	$328.28 Million	$325.54 Million

T = Technicals on the Stock Chart Are Strong

Activision hasn’t performed as well as many other stocks throughout the broader market over the past few years, but the industry had been hurting for a while. Currently, that trend might be reversing itself.

Activision has outperformed Electronic Arts (NASDAQ:EA) and Take-Two Interactive (NASDAQ:TTWO) over the past year. Activision is the only company of the three that offers yield, which is currently 1.50 percent.

	1 Month	Year-To-Date	1 Year	3 Year
ATVI	22.66%	26.93%	8.96%	38.50%
EA	25.71%	19.21%	-5.10%	-0.58%
TTWO	27.33%	36.24%	-6.89%	58.73%

At $13.54, Activision is trading above all its averages.

50-Day SMA	12.36
100-Day SMA	11.74
200-Day SMA	11.15

E = Earnings Have Been Steady

Earnings and revenue have improved every year over the past five years.

	2008	2009	2010	2011	2012
Revenue ($)in billions	3.03	4.28	4.45	4.76	4.86
Diluted EPS ($)	-0.11	0.09	0.33	0.92	1.01

When we look at the last quarter on a year-over-year basis, we see an increase in revenue and earnings.

	12/2011	3/2011	6/2012	9/2012	12/2012
Revenue ($)in billions	1.41	1.17	1.08	841.00M	1.77
Diluted EPS ($)	0.08	0.33	0.16	0.20	0.31

Let’s take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

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